Friday, October 19, 2007

Video Game Diaspora

Eutechnyx, a U.K.-based video game producer, is searching for a base of operations in North America:

Pittsburgh could have an early edge. [Darren Jobling, an owner and director of business development for Eutechnyx], said he hopes to tap talent coming out of Pittsburgh's renowned training grounds for video game design, the Entertainment Technology Center at Carnegie Mellon University and the Art Institute of Pittsburgh's video game arts program.

"Pittsburgh looks to be a great base," Jobling said. "We like the fact that there are great university links and that there's not a lot of competition there at this time."

Pittsburgh is a frontier innovation market. There is plenty of intellectual capital in the region, but that potential is relatively under-exploited. The local pessimists tend to overlook such developments, instead focusing on past losses such as the move of Lycos to Boston.

Pittsburgh is situated to become a center of the virtual economy. The foundation already exists, but I don't think anyone has recognized this innovation cluster theme. Before someone directs me to evidence to the contrary, let me clarify what I mean.

Between startups such as Etcetera Edutainment and the social networking of Pitt in Hollywood, you only have part of the economic development story. The freelancing hub at Guru and the unique disposition of Pittsburgh's Diaspora comprise an emerging labor mobility landscape that few regions can rival.

My blog is a visioning exercise for Pittsburgh's niche in the global economy. Pittsburgh is an important nexus in the world geography of talent. The battle is to figure out the best way to translate that position into regional economic benefit. The good news is that domestic talent demographics (hat tip to David Campbell) are beginning to swing in Pittsburgh's favor.

There is considerable disjuncture between the location of talent supply and talent demand. Talent demand is centered in areas with overheated real estate markets (see Richard Florida's description of the Spiky World geography). Substantial talent supply is coming from a number of places struggling to gain a foothold in the post-industrial economy while the most geographically mobile are relocating to residences that they find the most desirable (in terms of climate, schools, etc...).

That Eutechnyx is seriously considering Pittsburgh is testament to this emerging strategy to secure increasingly scarce talent. The abundant labor that local universities produce, along with the relatively inexpensive real estate, make Pittsburgh attractive. However, there is still a proximity problem (which is why the world continues to trend towards the spiky).

I contend that the Burgh Diaspora can solve this proximity problem. Capital exchanges are much easier among people who already have a common cultural experience and established lines of trust. Face-to-face interaction is less important, relieving the burden of high economic rents that result from the need to concentrate talent in the same place.

No comments: